New Delhi, June 11, 2017

Economic Survey has proposed innovative ideas, but challenge is in allocation of subsidies: FinMin

Finance Minister Arun Jaitley on Sunday said the government is debating the bad bank and universal basic income proposals made by the Economic Survey.

He said the proposal for the Universal Basic Income is unlikely to pass muster due to political limitations.

“I have been having debates with him (Chief Economic Adviser Arvind Subramanian) on both his current suggestions. I am fully supportive of his idea of Universal Basic Income but realise the limitations of Indian politics,” he said while inaugurating the workshop on ‘Contemporary Themes in India's Economic Development and the Economic Survey’ at IIT-Delhi.

He said while the Economic Survey has proposed many innovative ideas, the challenge remains on how to allocate subsidies in a targeted manner.

“This year, the Survey has initiated a very important idea as to how do we subsidise and substitute the entire set of subsidies...we want to replace it by a Universal Basic Income (to a defined section of poor) and that it expedites their pulling out of the present state of poverty that they live in,” Jaitley said.

However, the Minister said that he is concerned that people will stand up in Parliament and demand that current subsidies should be continued along with the Universal Basic Income. “That is something that the Budget will not be able to afford,” he said. The Chief Economic Adviser to the Finance Ministry is conducting a one-week workshop for “for students and teachers of Economics both at the undergraduate and advanced levels as well as policymakers interested in the Indian economy”.

It will include discussions on Indian macro-economy, fiscal policies, Goods and Services Tax, subsidies and Universal Basic Income as well as demonetisation.

Jaitley also congratulated Subramanian on “donning his robes as an academic” and stressed that policy makers also must continuously update their knowledge on various issues.

[The Hindu Business Line]